Step-By-Step Guide On Reselling PS3s

By consumerist.comFebruary 7, 2006

Do you want to get rich by playing the supply-exploit-demand eBay game on the next big video game console? Did you see those ridiculous $1000 X-Box 360 eBay auctions and think, “Man, I wish I could get in on some of that exploitive action?” Your prayers have been answered, because this blog has a remarkably sleazy and delusional article up on the fine art of console reselling.

Specifically, he claims that the Playstation 3 video game console is going to be just as profitable (if not more so) than the X-Box 360, which is why you should buy, then resell, as many as possible. Here’s his argument:

So, on to question 2… will the PS3 launch be the same? Undoubtedly, yes. Sony has learned a lot of lessons from Microsoft with this previous launch, such as how to spin “low inventory levels” into a media PR event. In short, Microsoft gained worldwide publicity from this craziness. Perhaps Microsoft could have met demand and let’s assume they did. If everybody was able to walk into a WalMart and buy the XBOX on launch day with no problem, we would not be talking about it now. In fact, nobody besides gamers would even hear about it outside of that first week. However, there was all this news about people camping out, XBOX 360s on eBay for more than $1,000, scam artists selling ‘XBOX 360 boxes’, etc. that virtually every man, woman and child knew how ‘hot’ the XBOX 360s were. Do you think your non-gaming neighbor heard about it? You bet they did. And they might even buy one if they saw one on a shelf today.

We rarely say this on The Consumerist, but this guy’s a farging idiot, and he’s about to piss away his X-Box 360 profit on the PS3 launch.

First of all, the scarcity of X-Box 360s at launch was not a public relations triumph for Microsoft: it was a public relations disaster. To date, there are still people who want to buy the console who can’t actually buy one. Many of these people preordered the system… in other words, they aren’t converts swayed by the blood in the water of the consumerist feeding frenzy that ensued as supply failed to meet demand. That “every man, woman and child” knew about the X-Box 360 doesn’t mean they could ever give Microsoft their money. It doesn’t take a triple digit intelligence quotient to recognize that if one of your customers can’t buy your product, you aren’t maximizing your profit, and that publicity means jack squat if no one can buy the product the publicity is about. Furthermore, many people have given up on owning an X-Box 360 entirely who would have gleefully purchased it if it was available on release. Hey, priorities change, the cash surplus you have today gets spent on other things and then you’re broke again, or just plain frustrated. Microsoft lost customers over the fiasco.

Sony’s stupid – the root kit fiasco proves that plenty. But they aren’t stupid enough not to have learned a lesson from Microsoft’s misguided race to first in a new console generation. If you buy PS3s for eBay value, you are going to get burned, because Sony is going to try to sell more PS3’s in the first month of release than Microsoft managed to supply from date of release to PS3 launch. Sony is not going to give up the mantle of most successful console willingly – they are going to saturate the market with PS3s, because that’s the only way they are going to make money off of the software they sell.

Buy a PS3 because you want one. Don’t buy it to become a millionaire off of eBay.

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Not being able to sell enough consoles hurts a lot of things. Xbox 360 execs even said as much in a recent interview when they figured out that the fact there were no 360’s in inventory boosted PS2 sales considerably (Parents walk in to a store to buy a 360, don’t see any, and refuse to go home empty-handed, so they buy a PS2).

Sony will not make this mistake. They will delay the launch before they have a massive shortage that lasts months (though I bet it can be expected to last two weeks or so).

This also has an effect on long-term sales. If not enough people have the console in their hands, then developers don’t want to develop new games for it, because the market of potential buyers for the game isn’t big enough yet.

Maybe you’ll make $100 or even $200 during the first week(s) of PS3, but sitting out all night to get one of the first one’s doesn’t make that $100 profitable. You can make more working fast food (In India).

Console hardware is not where the 360 will make Microsoft the kinds of big bucks they desire. They’ve got 2 significant revnue streams from the sale of the 360: XBox Live! subscriptions and their cut of every new game sold for the 360. The ONLY way to maximize those revenue streams is to place consoles in the hands of players with money. Anything that creates a barrier to that is inhibiting profit potential.

Had the inital shortage of 360s been followed, say a week or 2 later, with a HUGE shipment then maybe one could have argued that the shortage was manufactured to generate buzz. The fact that even today finding an actual 360 sitting on a store shelf is a rarity means that MS has fallen short.

Guilty as charged. I bought an X-box 360 on ebay right after their Nov. fiasco retail release hoping to recoup my ‘investment’ and double my $$. Nope. Broke even when the law of supply and demand took over and there was a glut of like-minded peeps doing the same thing. Lesson learned for me is that you can resell it once and make a killing at $800, but no one will really pay much more than that closer to xbox-mas.

Why buy from me when someone two ads down was offering free overnight shipping for the same price. (Although I believe I was the first person in ebay history to offer FREE pizza with my order.) The thing that was perpetuated though was the myth that the mid-December shipments to retail stores would solve the shortage problems.

Instead it only created negative buzz when it turned out not to be true. Stores like EB Games that I phoned said any that did come in would go to fill pre-orders. Walmart near me said all they ever were scheduled to get anyway in November was 15. 15??? If Microsoft did this all to create buzz, they sure pissed off a lot of consumers.